SHFE aluminium rebounds on position reduction, extending recovery; Alumina falls on position increase, weakness unchanged

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The SHFE aluminium 2608 contract opened at RMB 22,850 per tonne, reached a high of RMB 23,080 per tonne, dipped to a low of RMB 22,785 per tonne, and closed at RMB 22,940 per tonne, up RMB 105 per tonne or 0.46 per cent from the previous trading day. Trading volume was 146,200 lots and open interest was 246,000 lots, with a daily decline of 7,151 lots.

Price settled above the MA5 (22,687) and MA10 (22,840.50), but remained below the MA20 (23,433.75), MA40 (23,982.50), and MA60 (24,287.67). Short-term momentum improved, but the medium- and long-term bearish pattern has not yet reversed. On the MACD, DIFF (-444.86) was below DEA (-410.16), and the histogram recorded -69.41, indicating persisting bearish momentum but narrowing significantly from earlier.

Trading volume of 146,200 lots declined further from the previous session, and the daily open interest decline of 7,151 lots signals continued capital outflows. Today's uptick was more a reflection of technical recovery driven by short-covering.

SMM commentary: The indirect technical talks between the US and Iran made progress, with both sides discussing fund repatriation and strait security, and consultations on the nuclear issue are about to begin. The geopolitical risk premium continued to shrink, while disputes over the management of the Strait of Hormuz persisted, leaving uncertainty over the strait’s resumption of navigation.

The US Fed’s hawkish pivot boosted the US dollar index, putting pressure on non‑ferrous metals prices. Amid macro headwinds, aluminium prices fell in and outside China, with bearish factors dominating in the short term. Aluminium prices are expected to be in the doldrums going forward.

The alumina 2609 contract opened at RMB 2,727 per tonne, hit a high of RMB 2,727 per tonne, dipped to a low of RMB 2,694 per tonne, and closed at RMB 2,701 per tonne, down RMB 16 per tonne or 0.59 per cent from the previous trading day. Trading volume was 184,200 lots and open interest was 352,500 lots, with a daily increase of 18,337 lots.

Prices remained below the MA5 (2,732), MA10 (2,776.60), MA20 (2,835.35), MA40 (2,812.43), and MA60 (2,815.27), with the moving averages in bearish alignment and the market continuing to show weakness. On the MACD, DIFF (-30.82) was below DEA (-11.56), and the histogram recorded -38.51, signalling continued bearish momentum.

Trading volume of 184,200 lots pulled back slightly from the previous session, but the daily increase in open interest of 18,337 lots indicates additional capital entering at lower levels, with bears remaining aggressive.

SMM commentary: According to SMM data, as of last Thursday, total domestic alumina inventory had edged down from the previous week. By inventory structure, raw material inventories at aluminium smelters continued to destock slightly, but given the recent sharp price fluctuations and divergent market outlooks, restocking appetite was weak, with end‑users largely on the sidelines. Alumina in-factory inventory decreased, mainly due to phased maintenance at some northern refineries, where production constraints led to priority use of in-factory stocks; this impact is expected to fade gradually after maintenance concludes next week.

Port inventories continued to build, with ex‑China port arrivals staying high and import cargoes supplementing spot supply, adding pressure to the market. Overall, the oversupply picture remains unchanged, and before Guinea’s bauxite export quota policy is implemented, the market lacks clear bullish drivers. Next week, inventories are likely to shift from weak destocking to a slight buildup, with supply-demand staying ample and alumina prices expected to continue to be in the doldrums.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.